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Define what success means for your farmDefine what success means for your farm

Finance First: The meaning of success is going to be a little bit different for each operation.

Darren Frye

October 2, 2023

3 Min Read
Sunset over corn field in the fall
Getty Images/iStockPhoto/LE Reynolds

If I asked you to define what success means for your farm, how would you respond? At first glance, the answer seems pretty obvious, doesn’t it? Since the farm is a business, many would be inclined to define success purely in terms of financial outcomes.

Thinking solely in terms of financial outcomes – sometimes even looking only at the financial outcomes of one single crop year – usually doesn’t reveal the full picture. Looking only to those outcomes as measures of success can be deceiving. Doing so could even lull the farm’s leadership into a belief that the farm is very successful even though other major components of what makes a successful operation are being neglected.

The full picture

The key is to get a more balanced look at different measures of success in the operation. The farm’s financial outcomes for the year are certainly part of that picture, but they’re not the entire story.

The reality is that because each farm operation is unique in certain ways, each farm’s definition of what success means will be a little bit different. When a farm operation defines exactly what it will look like to be a successful operation, they can then hone in very closely to create goals and the steps they will take to achieve them.

Farm operations aren’t cookie cutters of each other and their goals and definition of success aren’t going to be, either. If you’re working with advisors who use a ‘one-size-fits-all’ approach when it comes to your farm and your goals, then it’s probably time to find someone else to work with. They should care about tailoring their advice and helping you make plans that are specific to your operation – not a generalized idea of the average “successful farm.”

Tips to define success

Here are three questions to sit down and ask after harvest with your farm’s leadership team or farming partners to help define success for your operation.

  1. Why are we farming? What do you hope for this operation to be like in 10-20 years? Try to envision exactly what the farm will look like, what areas of production and business will be involved, who will be involved, etc.

  2. Where do we want to be in the future? What are the goals that will get your farm to become what you desire in the future? Once you have figured out the goals, it’s time to determine the best way to measure the outcomes that you want. The outcomes are very likely not all financial measures either – though some of them probably will be.

  3. What’s our definition of success for our operation? You will want to work through this with your leadership team, spouse, farming partners, close advisors, and anyone else who is important to the mission of your farm. Get clear and on the same page about what a successful farm looks like and doesn’t look like when it comes to your own operation.

How are you navigating this market?

Farmers have found that getting some third-party perspective from our market advisors has helped ease their minds. The advisors help farmer clients with planning and execution around marketing decisions and help keep them up to speed on the current rapidly-changing grain market situation – and how it impacts their operation.

Get a free two-week trial of our marketing information service (MarketView Basic). Your free trial includes regular audio and video updates, technical analysis, recommendations and more. Learn more about our market advisor programs and offerings at www.waterstreetag.com.

About the Author(s)

Darren Frye

CEO, Water Street Solutions

Darren Frye grew up on an innovative, integrated Illinois farm. He began trading commodities in 1982 and started his first business in 1987, specializing in fertilizer distribution and crop consulting. In 1994 he started a consulting business, Water Street Solutions to help Midwest farmers become more successful through financial analysis, crop insurance, marketing consulting and legacy planning. The mission of Finance First is to get you to look at spreadsheets and see opportunity, to see your business for what it can be, and to help you build your agricultural legacy.

Visit Water Street Solutions

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